Whither traditional PACs?

By adding the word Super, removing contribution limits and opening up the donor pool to all-comers, political action committees have been revitalized. There are now over 800 Super PACs operating today.

This election cycle, these groups raised almost $350 million and spent more than $215 million—three-quarters of it supporting conservative candidates and causes. And all of those totals accumulated before the traditional start of the campaign season, which used to begin after Labor Day.

Metrics measuring traditional PACs suggest they continue to play a significant role in funding Democratic House candidates and an increasingly insignificant part of Republican campaign budgets. This phenomenon is directly related to provisions of McCain-Feingold, and may be exacerbated in the future thanks to the Supreme Court’s Citizens United ruling.

Campaign contribution provisions in McCain-Feingold are beginning to have important consequences—intended or unintended—for how congressional campaigns are funded. This is a result of which kind of contribution the law indexed to inflation. Until the reform passed, individuals could donate $1,000 per election per candidate, while PACs could donate $5,000 per election per candidate. So pre-McCain-Feingold, at the maximum, an individual’s donation represented 20 percent of a PAC’s limit.

The new law doubled the limits on contributions by individuals to $2,000 per election, and then indexed that limit to inflation. PAC donations remained mired at $5,000 per election. The law now set individual totals at 40 percent those of PACs, and that figure is closing due to inflation.

In 2011-2012, the Federal Election Commission set the individual limit at $2,500 per election or 50 percent of the top PAC contribution amount. PACs may now want to follow baseball great Satchel Paige’s advice: “Don’t look back. Something might be gaining on you.”

According to candidate summary data compiled by the FEC, PACs accounted for 29 percent of total receipts flowing to House candidates in the 2009-2010 election cycle. That’s down from 32 percent in 2002. Yet, total PAC contributions are increasing cycle by cycle. In 2002, House candidates collected about $207 million from PACs. Eight years later, that figure jumped to almost $314 million—an increase of 52 percent.

While impressive in a vacuum, the increase in PAC dollars is dwarfed by the amount House candidates are amassing from individuals. Between 2002 and the 2010 election, total donations from individuals skyrocketed from $321 million in 2002 to $639 million during the last election cycle.

The dependence on PACs—and their static contribution maximum—should be worrisome for Democratic Party officials. Since 2002, Republican House candidates have seen total contributions from individuals increase 109 percent to $353 million, while Democrats collected $286 million in 2010—an 88 percent jump from 2002.

As a percentage of total receipts, Democrats have actually become more dependent on PAC donations. In all, 36 percent of Democratic House receipts came from PACs in 2010, up from 33 percent in 2002.

Finally, the diminishing impact of traditional PACs as a funding source may be accelerated by recent Supreme Court rulings on campaign finance. The Court ruled in Citizens United that corporations and unions could spend whatever they want supporting or opposing candidates for office. In June, the Court summarily reversed a Montana Supreme Court decision upholding a state law limiting independent spending by corporations.

With legal permission to spend as they see fit, corporations in particular may reevaluate the utility of maintaining the infrastructure of their PACs, including staff, consultants, websites, etc. They may decide to give directly to Super PACs—on both sides—that are aligned and basically authorized by congressional leaders.

Essentially, soft money is resurrected in the body of the Super PAC instead of the national political parties. And the political system is condemned to repeat the history of campaign finance reform

Gary A. Feld, Ph.D. is Principal at PowerBase Associates LLC, a research and strategic communications firm based in Alexandria, Virginia.